Structural change in Southern softwood stumpage markets

Carter, D. R.

The potential for structural change in southern stumpage market models has impacts on not only our basic understanding of those markets, but also on harvest, inventory and price projections, and related policy. In this paper, we test for structural change in both sawtimber and pulpwood softwood stumpage markets in the U.S. South over the period 1950-1994. Test results strongly reject structural stability in both sawtimber and pulpwood supply over the period. However, stability in stumpage demand can not necessarily be rejected. Using a new technique, Flexible Least Squares (FLS), a series of varying elasticity models are estimated. Results of the FLS procedure show that both pulpwood and stumpage price supply elasticities have been trending upward over time. The degree of this trend depends upon whether a linear or log-linear model is specified.